"Do I choose which debts I want to include in my bankruptcy or does the trustee do this? I have a bank loan for my truck which I pay on time and I want to keep my truck and keep making payments. Do I have to include this loan in my paperwork for a bankruptcy? What happens if I don't include it?"
Answer: All debts must be listed in the bankruptcy petition. You can select to 'reaffirm' certain debts. Most chapter 7 consumers reaffirm financed items -cars, houses, jewelry, furniture and electronics. You can usually keep the asset by agreeing to keep paying for it. Now, your budget has to show that you can afford the payments, otherwise the judge could request that you prove how you can afford the payments if your budget shows you cannot.
Similarly, you must list all debts in a bankruptcy case, technically even small personal debts, such as the $10 you owe your Aunt Sue should be listed too! Otherwise, it would be bankruptcy fraud if you intentionally omit a creditor from a bankruptcy petition.
Amendments: if you find out that you inadvertently left a debt out of your bankruptcy filing, perhaps an old medical bill from 4 years ago, don't fret. You can always amend to include that bill in your case. If you do not, it will not be discharged under the bankruptcy code under BAPCPA. The court charges a nominal fee to amend to add another debt if you case is still open.
| Chapter 13 Stop mortgage foreclosure |
| Keywords: chapter 13, bankruptcy, foreclosure, consolidation, chapter 7, mortgage, mortgage default, credit cards, medical bills, interest rate, ARM, adjustable rate mortgage |
| Stop Foreclosure Yes, you can save your home! Using the chapter 13 can strategically help you cure your mortgage default, protect your equity and eliminate your other debts to help you right the ship. Several years ago, we saw a boom in mortgage lenders offering low adjustable rate mortgages (ARMS) 100% to 110% mortgage loans, and no money down mortgages. Today, we have seen these ARMS increase from 5% to 8%, 9% or more depending on the lender. Homeowners are being bombarded with a mortgage payment that is almost double than it had been previously before the interest rates have started to rise. What is a homeowner to do? With the soft real estate market, homes have not appreciated in value, or not enough to allow homeowners to refinance and use some of their equity to help with the higher rates. Chapter 13 is an option. In a nutshell, consumers can file chapter 13 which will let them catch up on their mortgage payment, interest free. It can also consolidate their other financed items and often save money on the interest rates. Currently, debtors can pay cars, furniture and jewelry back at prime rate of interest or prime +2, or +3. Bankrate.com shows a current prime rate of interest at 8.25%. Consumers can also consolidate their credit card debt, medical bills and other consumer debts and pay them back, with little or now interest, and often can pay them as low as 10 cents on each dollar owed!By doing this, consumers can cure any mortgage arrears, pay off their secured debt for vehicles and for big ticket financed items, while eliminating their consumer debt. A Chapter 13 bankruptcy can run from 3 to 5 years. This depends on your monthly household disposable income. There are several recent changes to the Bankruptcy Code that can affect this repayment plan. These changes were part of the BAPCPA reform. Therefore, it is crucial to discuss with an experienced bankruptcy lawyer about the various law requirements and qualifications based on your unique situation. For instance, let’s say Johnny Consumer owns a home worth $100,000 in Chicago, Illinois. Let’s say he has a $70,000 mortgage with the bank, but has fallen $6,000 behind and the mortgage company has started a foreclosure. Johnny was recently out of work do to an injury on the job. He has just went back to work, and sees no way to catch up $6000 any time soon. He has $10,000 in medical bills. He owes $3000 on his car. For our example, let’s say that Johnny makes $3000 per month and takes home about $2100. His mortgage is $700 a month, his car note is $300 and he has $67 left at the end of the month to use to try to catch up with the medical bills and the mortgage arrears. At first glance, there is no way he can manage this on his own. Under a chapter 13, Johnny can make a monthly payment of $367 to the court. This will allow him to catch up on the mortgage, pay off his car note, and eliminate the medical bills he has. This will only take 3 years. It will protect all of the equity he has in his home and stop the foreclosure! Therefore, if you are looking to stop foreclosure, and have steady income, Chapter 13 could be a great tool to use. You can always refinance or sell your home while under Chapter 13 if you wish to pay off the bankruptcy and move on with your life. The Chapter 13 stops the foreclosure immediately. Often, your only other option would be to refinance, or enter into a repayment agreement with your mortgage company. All too often, they want a double payment each month until you can catch up. If you had that kind of disposable income, you probably wouldn’t be in this situation in the first place. Contact an experienced Chapter 13 bankruptcy attorney today to discuss these options. You don’t need a home to file either. Often consumers just wish to get a better deal on their old car note, consolidate their credit card debt to eliminate the high interest rates…or wish to consolidate their old student loans and parking tickets. There is a way to pay back old IRS debt as well as pennies on the dollar. Pick up the phone and call me at 312-427-7400 and I’ll be happy to give you a free consultation by phone or schedule an appointment at one of our convenient office locations. We also have a free online legal evaluation to try as well. The time to act is now if you want to save your home from foreclosure. |
Illinois Mortgage Foreclosure Law (IMFL), 735 ILCS 5/15–1507,1508; 1602
The entire process in Illinois takes, on average, from the filing of the complaint to the eviction by the sheriff, nine months. Foreclosure defense in court is seldom successful in defeating the foreclosure action but may prolong the foreclosure by as much as 24 months. If the property is not residential or is abandoned, the process can be substantially shortened. The following is an outline of a typical foreclosure case:
